52 week Low/High : Delivery trading Strategy 1

The 52 week Low/High strategy is for those traders who wants to trade in defensive stocks. If you are not very much interested in Intraday trading but the long term delivery trading, this article delight is for you all traders. First get to know what are defensive stocks. Defensive stocks are those stocks which do not fall massively when the stock market crashes and again, it does not grow massively when the stock market is booming. For example; HUL, ITC, Nestle India, Avenue Supermarts, Sun Pharma, Cipla Ltd ; these are defensive stocks due to their stable demand network. Defensive stocks tend to perform better than the broader market during recession. However, during an expansion phase, they tend to perform below the market. Now, if you wish to trade in such stocks, here is the strategy delight to follow :

52 week Low/High Stategy

What is 52 week Low/High ?

The 52 week Low/High (want to know more ? https://www.investopedia.com/terms/1/52weekhighlow.asp) is the lowest and highest price at which a security has traded during the time period that equates to one year.The 52-week high/low is based on the daily closing price for the security.

Strategy : First we will take 52 week low as support level and 52 week high as resistance level. Support occurs where a downtrend is expected to pause due to a concentration of demand. Resistance occurs where an uptrend is expected to pause temporarily, due to a concentration of supply. We will buy our defensive stocks when the trading value of that particular stock is approaching 52w low. Now, as we know that we are investing in defensive stocks, we are quite sure that these stocks will definitely bounce back . So after buying near the traded value of 52w low, we sit quite and exit from market once it approaches the 52w high , selling in profit.

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